The world today relies heavily on fossil fuels, but this will undoubtedly change in a decade, leading to a growing demand for critical minerals

Major world economies are making concerted efforts to rapidly transition to clean energy in a bid to minimise their greenhouse gas (GHG) emissions and contain the fallout of climate change. However, their efforts hinge mainly on how efficiently they manage the vulnerabilities in supply of critical minerals, needed for low-carbon technologies. As the demand rises, it is necessary to have a broader global collaboration among G20 members for the production of critical minerals which are concentrated in a handful of countries.

There are several minerals that are deemed critical for a rapid shift to clean technologies, including electric vehicles (EVs). Lithium, nickel, cobalt, manganese and graphite are crucial to battery performance. Rare earth elements (REEs) are essential for permanent magnets used in wind turbines and EV motors. Electricity networks need a huge amount of aluminium and copper.

Understanding the Global Distribution of Critical Minerals

Lithium, for example, is a mineral vital for production of EVs and battery storage capacities. Nearly half of the world’s known lithium reserves are in Australia (47%). It is followed by Chile (30.2 %) and China (14.7%), according to a recent study by the Council on Energy, Environment And Water (CEEW).

Fig 1. Only 15 countries mainly have the deposits of critical minerals.

China also has nearly two-thirds of REEs and graphite deposits. Indonesia (48.8%) has almost half of the world’s nickel deposits while 46% of the cobalt reserves is in the Democratic Republic of Congo. Similarly, the other critical minerals too are distributed within the boundaries of a few countries.

The Importance of Critical Minerals: Understanding Their Role in Clean Technologies

From solar photovoltaic (PV) plants and wind farms to electric vehicles (EVs), they generally require more minerals to build than their fossil fuel-based counterparts. For instance, a typical EV requires six times the mineral inputs of a conventional car and an onshore wind plant requires nine times more mineral resources than a gas-fired plant.

According to an IEA report, meeting the Paris Agreement goal of keeping the global temperature rise “well below 2 degrees Celsius' would mean a quadrupling of mineral requirements for clean energy technologies by 2040. An even faster transition, to hit net-zero globally by 2050, would require six times more mineral inputs in 2040 than today.

The CEEW study further breaks down the requirement. It says the focus on clean technologies (solar, wind, batteries for EV and grid storage) will account for the majority of the lithium demand – up to 91% – by 2050. Nickel demand is estimated between 34-55% of the total demand by 2050, while copper demand is estimated in the range of 29–43 % by then.

These estimates provide a clear indication of the dependence on critical minerals for developing the key technologies for a sustainable future.

Fig 2. Table shows minerals used to develop different low-carbon technologies. Image via CEEW study.

How do we meet the expected demand for critical minerals?

The world today relies heavily on fossil fuels. In 2021, 77% of the primary energy supply came from oil, coal and natural gas. But this will undoubtedly change in a decade from now and there will be a growing rush to secure minerals that will propel this shift towards low-carbon technologies..

To meet the future demand, there is a need to overhaul exploration, mining, and processing of critical minerals. This includes new technologies to detect mineral deposits and improving current mining practices to increase production.

Fig 3: A are earth open pit mine REUTERS/Steve Marcus/File Photo

A significant investment would be needed in technologies to enable diversification of mineral usage and reduce over-dependance on some minerals. For instance, replacing cobalt with other minerals in battery cathode materials, replacing graphite with silicon for battery anodes, developing rare earth–free EV motors are some options that should be tried. Additionally, there is a need to extend product use (second-life application for batteries) and mandating repairs and services for extending the life of various consumer goods, besides increasing recycling of discarded products.

The study identifies two key priorities for the G20 countries to address mineral supply chain vulnerabilities for clean energy technologies.

First, they need to develop a shared vision for increasing the supply of critical minerals. For this, an institutional mechanism should be set up to periodically assess the mineral value chain. The G20 should also support investments for developing new exploration and mining technologies and examine the creation of a strategic stockpile of critical minerals.

And second, the major economies should enhance global mineral security by scaling up reduce and reuse efforts. They must encourage focused R&D efforts to improve existing technologies for resource-efficiency and support the development of alternative technologies that reduce dependence on critical minerals.